Search This Blog

On Mitigating Brand Risks with the Power of Brand Trust

The
benefits of an information-connected world have been widely experienced by most
of humankind. This unbound freedom of expression is giving rise to a new world
with information democracy making a compelling impact on the fate of the big
and powerful. Governments, institutions, brands, and the influential are all
being subject to microscopic scrutiny by the masses, who are armed to
unforgivingly ‘share’ unfiltered individual opinions. Every drop of individual
reaction now has the potential to unnoticeably but swiftly swell into a tidal wave of mass opinion.

However it may be seen, Brand Trust is fragile, like a
sparrow chick held in one’s hand – hold it too tight and you’ll suffocate it;
hold it too lightly and it will escape. The grip has to be just right, and to
keep the bird alive and thriving needs constant nurturing. The brand risks
associated with loss of trust in our perplexing networked world makes
predictable consequences difficult, but most of us intuitively understand that
trust must be a constant endeavor for a better future.

The world’s biggest and oldest corporates are now
faced with new brand risks that threaten the trust they have painstakingly
built over decades. On the other hand is the world of start-ups, some of which
have quickly acquired multi-billion-dollar valuations backed by the trust of
their investors. In their hurry to grow, a few of these start-ups have lost
trust of their consumers due to wrong action, communication, transgressions, or
plain inanity.

However, no matter how different, that which went
wrong in both the old and the new corporates were similar issues like security,
privacy, caring, transparency, competence, sincerity, and social values, among
others – attributes that make up Brand Trust. These brands did not lose trust
because they had lesser revenues or lower profits, but they lost trust because
they failed to prop up the essential intangibles of Brand Trust.

A brand must constantly analyze the brand risks it faces
with regard to trust to create and implement strategies that will help mitigate
these risks. There will be times in the lifecycle of a company when it may
communicate wrongly or make mistakes. However, the risk is not in the fact that
these incidents occurred, but instead is resident in how prepared was an
organization to mitigate the risks faced and how it reacted to them. Learning
from Brand-Trust-related risks is how organizations build greater long-term or
Residual Trust.

Trust is like a river, in that its different layers of
trust move at different speeds, akin to the cross-section of a river. The
bottommost layer in the river is the slow-moving, more stable layer, which in
Brand Trust is represented as Residual Trust – the trust accumulated over time
and through repeated successes. However, this slower layer too is impermanent
and is constantly moving, albeit at a lower speed. The top layer is the fastest
and also the most fleeting. In trust terms, it represents anything new – new
action, new brand, or new communication. Brands must see the top layer of new
trust as the seed that grows into the bottom layer of Residual Trust and always
act with a long-term, fundamentals-oriented view.

In almost all our consulting assignments on
Brand Risk mitigation, the one aspect of diagnosis that carries the maximum
risk is the stakeholders’ self-awareness of the potential of Brand Risk. In
several cases, many of the stakeholders fail to recognize this basic problem,
preferring to stick their heads in the sand. It is such brands that are most
vulnerable to eroding their Brand Trust. There are enough cases that surface
every week on some company or the other where Brand Trust is visibly eroded at the
most unexpected times. As some farsighted organizations have already begun,
perhaps the time has come for all organizations to create an internal Brand
Trust team that constantly evaluates threats to the brand and manages its
mitigation.

Comments

Popular Posts

Recently, I interviewed a young journalist wanting to turn to public relations as a profession and I asked her two questions. The first, why she joined journalism received an appropriate, though expected answer - 'To give a voice to those who cannot speak for themselves', followed quickly by 'It is perhaps the only profession in which you can be fearless and work towards correcting the wrongs you see in society.'

I gave her a smile, and lodged my second question. 'Why then do you want to shift to Public Relations?' She remorsefully replied, 'I'm disillusioned.'

That conversation, in a nutshell, sums up most of mainstream journalism today. Viewed from the outside, most see a brave, determined journalist standing up for the truth, upholding the 4D principles above all - Detect, Discern, Doubt and Demand. When seen from the inside, most journalists have experienced persuasion - bordering on mild coercion disguised as 'advice', management encou…

If there's a commodity that perishes as swiftly as it is created, it is news. The longer it takes to create, the higher its longevity and by corollary, news produced by the second, dies by the second.

We want our gratifications without any waiting period, we want to gulp down our food, build instant abs, get rich immediately and also know everything now. We are also anxious to know more and more, and information has become a status-according social currency.Fortunately, acquisition of knowledge does not have a finish line and so it behaves quite differently from instant abs or instant noodles.

In this hurried age, magazines play an important role by balancing societal myopia with perspective; need-for-speed with understanding, and anxiety with patience. The magazines analyze and opine like the elders of society - and hence also play the role of elders in the information society. In an age when every new opinion becomes news, magazines bring perspective through considered informat…

(also appeared in Firstpost) The recent Tata boardroom spat has
spawned many faceted discussions, and one of these has been on the appointment
and role Independent Directors – an aspect that not only concerns governance,
but also Board room expertise. Like many, I spent a considerable amount of time
wondering what the boardroom discussions would be like, extrapolating from the
little information that was available. To emphasize the need for expertise in the board, the rules
for appointment of independent directors of a board under the MCA Act require
the independent director to possess appropriate skills, experience and knowledge in one or more fields of finance,
law, management, sales, marketing, administration, research, corporate
governance, technical operations or other disciplines related to the company's
business. It is quite clear that expertise (and not just experience) is one
of the necessary qualities of the board. The question that kept coming back to
me was whether it …